Chapter 10
Sharing the Knowledge
When the alarm sounded on Friday, I bolted out of bed, anxious to get to the office to meet with Chris. What a week! Only four mornings ago, I learned about the mess that had happened while I was away, but what I’ve seen and heard since then has changed the way I look at the office. I was aware of the tough sell ahead and the skepticism I expected to encounter, but I was also ready for the challenge.
I got into my car and headed to work, rehearsing the pending encounter with Chris along the way. I parked and, as I walked to the office, noticed Chris looking at me from the window on the third floor, as if awaiting my arrival. At that moment, I was glad I had prepared for this discussion.
The ride up the elevator seemed to take forever. As the doors opened, Chris met me, seemingly eager to hear about my field trip the previous day, and we walked straight into my office. I did not even have a chance to check my e-mail.
“I’m really interested in what you learned from the benchmarking trip,” said Chris. “Mercy Hospital called again and wants an update on how we are going to correct things. It sure would be good to have a plan to share with them before this escalates.”
I took a deep breath and gathered my thoughts.
“OK,” I said. “As we’re both aware, we discovered a downward trend in our performance that we need to correct or we risk alienating or losing Mercy Hospital and other major customers. Because some of our smaller customers have tremendous potential for growth, any plan we put in place has to take care of all of our customers, not just the ones who are most important right now. I won’t bother going into any more detail on these issues since you’re as familiar with them as I am.”
“Possibly more familiar,” said Chris. “But who’s keeping score, right?”
“Right,” I said.
Well, no point in wasting any time. “Let me get right into what I saw and heard yesterday, what my approach was when I first got there, and what I’d like to share with you today. For starters, I admit that I was hoping I’d be able to simply copy what they did there and use it here to solve our problems. We’ve been using some continuous improvement tools ever since I got here, so I figured if this other company was using them better or more effectively, I’d just see how they did it and try to do the same thing here.
“But they looked at continuous improvement differently. They had moved beyond solving problems, eliminating waste, and simply trying to get better each day. They looked at creating Operational Excellence. They set a destination for what they were trying to accomplish with their continuous improvement efforts, and because they knew where they were going, they were able to get there much faster.”
“That’s interesting,” said Chris. “You mentioned Operational Excellence. Every company says that’s what they’re striving for, even us. Aren’t we doing that already?”
“Not exactly,” I said. “We’re just trying to continuously improve by using the latest tools, but they’re trying to get to a place where each and every employee can see the flow of value to the customer and fix that flow before it breaks down. That’s how they define Operational Excellence, and it’s by far the most practical and applicable definition I’ve ever heard.”
“Hmmm,” said Chris, letting that sink in. “That’s quite a definition, and when I think about it, that’s pretty much exactly what I want to see happening here. I like it. Keep going.”
“Well, I went there looking to solve our problems, but now, I’m seeing things from a much broader perspective. It’s not about looking for solutions to problems. It’s about growing our business.”
“Growing our business?” repeated Chris. “I’m starting to like this even more.”
“It was quite an insight,” I said. “We strive for Operational Excellence not only to create self-healing flow but also to grow our business.”
“Sounds good,” said Chris. “But how do we do that when we’re still having problems with some of our key customers?”
“This is the real beauty of it,” I said. “We’re going to do it by following a process. One of the first things I learned yesterday was that we can’t just copy their solution and use it here, but we can copy the process they used.”
“OK, that makes sense,” said Chris. “Our business is different from theirs anyway.”
“Even better, a process can be taught,” I said. “It can be shared with everyone in the company and used again and again to generate results. This is how they changed over there, and it’s how we can change here, too.”
“It must be some process,” said Chris, with a little disbelief. “But, I like what you said about how we’re able to teach it to everyone. That’s a good thought. Tell me more.”
I felt like I was getting somewhere.
“Sure thing,” I said. “One of the first things I learned was that we want to create flow through our office. To determine if we have flow, we need to ask five questions, and if we can answer them all successfully, we have flow. I won’t get into the details of those questions now, but suffice it to say that everything is so systematic that even something as seemingly simple as creating flow is done by following a process.”
“OK, so there’s a process for creating flow,” said Chris. “That’s supposed to transform this office into something spectacular?”
“Not by itself,” I said. “The five questions I just mentioned are used to determine whether we have flow. There’s actually a nine-step process to create flow through the entire office, one that we can teach and everyone can learn. It includes things like processing cells; workflow cycles; standard work at the activity and flow levels; and pitch to tell us whether we’re on time. And, get this: If we have flow through our entire office, then we can establish a guaranteed turnaround time for every single claim we receive.
“One of the things I learned is that we should flow information along predetermined, physical pathways at preset times and in first in, first out or FIFO fashion. Everyone knows the pathways and timing involved, so they know when they’ll get the information they need. No one has to make any phone calls or chase people or information. Once that flow is established, we make it so everyone can tell normal flow from abnormal flow just by looking. The result is that the flow self-heals when things start to go wrong. The associates fix the flow before it breaks down, and they do so without management intervention.”
“This is a breakthrough,” said Chris. “It’s a different way of thinking, and it sounds like just what we need. But, you talked about growing our business. How is this process going to do that?”
“By freeing up management to work on offense,” I said, surprised at how fluidly that rolled off my tongue. “By offense, I mean growing the business. We use a nine-step process to create flow through our entire office, but again, the secret is that the associates handle it all by themselves. They’re able to see when it’s about to break down and fix it on their own. Once the system is in place, there’s practically no management intervention whatsoever. Because managers aren’t spending their time chasing claims, people, and resources, they finally have the time they need to grow the business.”
Chris leaned back and let out a deep breath before speaking. “You know, I’ve been trying to figure out how to explain that to people for a long time now. I’m getting pressure from the top to spend more of my time generating new business, but I don’t have the time because I’m here 10 hours a day as it is just making sure everything gets done.
“I like it, Pat. I have to tell you, you’ve killed two big birds with one stone. Putting in self-healing flow that creates guaranteed turnaround times and frees up management to work on offense? I can see our market share growing already. So, I have two questions for you. How long, and how much?”
“That’s what’s so great about Operational Excellence,” I said. “It takes months, not years, because everyone works toward a common destination and follows the same process to get there. As for the cost, it’s all education, and whatever expense we incur will no doubt be offset by the business we gain and fiascoes we avoid. No more Mercy Hospital breathing down our necks, no more shuffling priorities, no more wondering when a claim will be completed.”
“So you, we, our company, can do all of this right now?” asked Chris.
“Well, I understand the concepts and think I can give them a shot,” I said. “After what I saw yesterday, I know there’s a lot more to learn. The first thing we need to do is get the executives aligned and onboard. That’s one of the most important steps. Without understanding at the top of the organization, everything else becomes a lot more complicated. Then, we use education to get everyone—executives, managers, and associates—moving toward a common destination of Operational Excellence.”
I paused to catch my breath, eyeing Chris and looking for a reaction. “So, what do you think?” I asked.
“I think I need to get educated. Put me first on the list. And Pat—good job.”
From the Author
The culmination of a transformation to Operational Excellence is working on offense, or activities that grow the business. In fact, many companies, as they begin their implementation of Operational Excellence, start tracking how much time they spend working on offense and the frequency with which management intervenes in the flow. Often, the amount of time spent working on offense is somewhat low and the frequency of management intervention is rather high.
As the implementation gets under way and nears completion, however, and if the guidelines have been followed and applied correctly to create self-healing flow, the amount of time spent working on offense should increase dramatically as managers are no longer required to spend significant portions of their day fixing problems with the flow. This freed-up time is now spent exclusively working on the activities that grow the business and typically increases significantly once self-healing flow has been fully implemented.
The reduction in management intervention and ability of leadership to work on offense are the primary channels through which the nine guidelines are linked to business growth. Applying the guidelines creates self-healing, autonomous flow in the office, and this is what frees management’s time to work on offense because the employees are now able to fix problems with the flow on their own.
But, it is not only management’s time that is freed to work on offense once the office has implemented self-healing flow and achieved Operational Excellence. Every employee will be working on offense, and the type of offense will vary depending on the employee. Senior leadership might spend time meeting with current and potential customers or devising new sales strategies. Frontline employees, on the other hand, might work on enhancing the standard work used to resolve abnormal flow conditions or creating more standard work to handle other abnormal flow conditions not yet encountered. Working on these activities not only enables more flow problems to be fixed quicker but also acts as a barrier that prevents the occurrence of management intervention on an ongoing basis, thereby enabling management to continue working on offense day to day.
In this way, achieving Operational Excellence in the office refocuses the activities of every employee toward offense. While strong results like decreased lead times and faster responses to customers will be realized in an office that has applied the nine guidelines, the true power of Operational Excellence is fulfilled when self-healing flow allows each employee to work on offense and help grow the business.
Applying the nine guidelines, creating self-healing, autonomous flow, and achieving Operational Excellence lays a foundation for sustainable business growth that can be achieved in months, not years, and provides a model that can be used perpetually to stay one step ahead of the competition.